Description

The price of various kind of metal which nickel, lead, gold, silver, copper, and bauxite are tend to raise in the last few years, especially since 2005. It was quoted in that year the world selling price of lead averaging US$ 7,507 per metric ton, even in the beginning of 2007, it has reached US$ 13,700 per metric ton. Likewise the realization of average price of nickel in matte, which happened to PT INCO in the fourth quarter of 2006 was US$ 24,725 per ton (US$ 11,21 per pound), it was raised 148.5% compared to the same period in the previous year of US$ 9,950 per ton (US$ 4,51 per pound). The same condition happened to the price of gold, silver, and copper, which tended to increase along the year 2006.

The increasing price of metal has encouraged the mine industry in Indonesia, which was slow because of the low price of the metal. For example PT Timah Tbk which has reduced their production as their lead deposit was uneconomical to mine. But now the condition are encourage as the government policy are regulating mining and illegal lead smelter, which cause the world supply of lead are decreasing, and the price are tend to increase.

Nickel mining are also encourage as the world demand of nickel are increasing, especially for the stainless steel industries from China and India, which their economy are still growing rapidly. Nevertheless, the price increase does not encourage new investors in metal mining in Indonesia, it was only played by the existing mining companies, which increase their performance to use the advantages of the high price of mining materials.

The other factor for new investors to enter mining sectors is the lack of new Mining Act, as nowadays many disputes has arise in mining sector that cannot be resolved by the existing Mining Act. One of them is the overlapping of Central and Regional regulation as the consequences of Regional autonomy. Taxation is considered inconsistent and burdened the investors. Even the uncertainty of law in Indonesia is considered as an obstacle for the new investors in mining. Even though Indonesia is one of the riches countries in the world for their mining materials; even some of them are not intensively explored.

This report is more focus on metal mining which has been explored by big mining company in Indonesia. The change in the world’s metal supply has encouraged the quest of more economical metal supplies. Various aspects in gold, silver, copper, lead, nickel, bauxite, and iron sand mining in Indonesia are discussed in this report as basic information in understanding various problems occurred in this industry. So that, base on this information, any parties involved in mining investments are hopefully can make the right decision.
To complete this report, we also discuss coal mining which now has become the prime energy source of world electricity. Indonesia has tried to maximize the role of those energy sources. Because of the increasing price of world oil lately, it has encouraged the government to find alternate energy source. Now, Indonesia has encouraged coal as the prime energy source for electricity, to change the role of increasing price of gasoline.

The government has planned to build 10,00 MW electric generators powered by coal in the next three years. This will boost the domestic demands of coal. In the meantime, Indonesia has become the second largest coal exporter in the world after Australia, with the coal export in 2006 of 130 million tons worth about US$ 3.4 billions. Whereas three years ago Indonesia ranked 4th after Australia, China, and South Africa with total export in 2002 of 73.1 million tons worth US$ 1.76 billions. In 2005 the coal export reached 110.8 million tons.

Due to the important role of metal and coal mining in Indonesia nowadays, PT Media Data Riset (mediadata) as a service company of data and information supplier, has prepared a study of Condition of Metal and Coal Mining Industry in Indonesia. This study discussed